The two watchdogs work jointly on the ScamSmart campaign, and warn this latest research shows “overconfidence” can lead to savers missing signs of a scam.
Its figures show that despite almost two thirds of people saying they are “confident” making pension decisions, the same proportion (63 per cent) would trust someone offering pensions advice out of the blue.
This ScamSmart research shows those with a university degree are 40 per cent more likely to accept a free pension review form a company they’ve not dealt with before, and 21 per cent more likely to take up the offer of early access to their pension pot. TPR warns both are common scam tactics.
This latest research also shows how devastating pension scams can be. The average amount victims’ lost to pension scams in 2018 was £82,000. The industry calculates that it takes an average of 22 years to build savings of this amount.
TPR executive director of frontline regulation Nicola Parish says: “Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites and so-called ‘expert’ advice.
“It can be tough to spot the fraud. Scams can happen to anyone, so before making any decision about your pension, take your time, and check who you are dealing with.”
Many in the pension industry welcomed these new warnings. The People’s Pension director of policy Gregg McClymont says: “Pension fraud is a very real problem, a crime which has become increasingly prevalent over the past decade, so anything that raises awareness is to be welcomed.
“The recent Pensions Schemes Bill included legislation that would give greater protection to savers, although that has been paused due to the upcoming General Election.
“It is vital that policy makers move swiftly to ensure that the law is tightened in the fight against ruthless scammers and recognise that they regularly change their methods.
Aegon’s head of pensions Kate Smith says: “It’s tempting to dismiss scams as something that only happen to other people. In reality though the one thing scammers don’t do is discriminate.
“Fraudsters are increasingly sophisticated and will re-invent their approach.
“There’s often warning signs that should set the alarm bells ringing, but if you rush into things or are too self-assured you may miss them.” She urged individuals to take their time, and not to engage with cold-callers.
Meanwhile Standard Life’s Tommy Burns, deputy chair of the pension scam industry group, adds: “Raising people’s awareness of the dangers and the various forms pension scams can take is one of the best defences against the scammers.
“Automatic enrolment means that more people than ever are now saving for their future through their workplace pension, but none of this matters if they lose their life savings to a pension scammer. It’s vital for us all to be alert to these dangers.”